Cameco cleared to buy Yeelirrie

Cameco’s $US430 million acquisition of
BHP Billiton
’s Yeelirrie uranium deposit in Western Australia, a deal that stoked diplomatic tensions between Australia and Canada, has been cleared by the federal government and is close to completion.

Sources confirmed yesterday that the Foreign Investment Review Board had recently approved the controversial acquisition, leaving WA premier Colin Barnett as the only person in a position to prevent it from going ahead.

Mr Barnett’s signature is required as Yeelirrie is the subject of a State Agreement. Saskatchewan-based Cameco expects this to be secured within days, allowing for the deal to be consummated ahead of the Christmas break. FIRB approval was considered most critical for Cameco as local politicians and executives in the uranium industry have used the acquisition to draw attention to the inequalities in Canada’s foreign investment policy.

Paladin
chief executive John Borshoff told The Australian Financial Review yesterday that he had lobbied the federal government to block the deal because Canada limited foreign ownership of uranium companies to 49 per cent.

“I don’t think it’s completely fair or on a level playing field, that’s all," he said. “That Canadian companies can come here and get 100 per cent of deposits and Australian companies can’t do it on the other side, it just defies logic."

Paladin picked up an interest in the Michelin uranium project in the province of Newfoundland and Labrador last year in a deal with gold company Fronteer Gold, which was subsequently acquired by Newmont.

Mr Borshoff said the acquisition of Yeelirrie should have at least been made subject to conditions that it be developed within a certain timeframe, rather than sat on.

Cameco said this year that its Kintyre project in WA, a joint venture with Japan’s Mitsubishi, would only be economic to develop if it received an average uranium price of $US67 a pound.